Announced last year in the budget speech by union finance minister P. Chidambaram, the scheme seeks to arrest the high dropout rate at secondary-level by offering financial support to economically backward students.

About Rs 3,004.04 crore will be spent towards the objective during the 11th five year plan. One lakh scholarships worth Rs 6,000 each, per annum, will be awarded to meritorious class IX students from economically weak sections every year. Monetary support will continue till the students reach secondary stage and complete class XII. Each successful student will thus get Rs 6,000 per year to study in classes IX, X, XI and XII.

Any student with parental income of not more than Rs 1.5 lakh from all sources will be eligible to apply for the scheme, to enable him to study in government, local body and government-aided schools.

After the cabinet meeting today, the finance minister said the purpose of the scheme was to award scholarships to deserving students from financially weaker sections and arrest the dropout at class VIII, besides encouraging students to complete their education up to class XII.

The government will hold state-level tests to select candidates for these scholarships; tests will be held in conjunction with the first level selection tests for National Talent Search Examination. As announced last year by P.Chidambaram, a corpus of Rs 750 crore will be created with the State Bank of India in the current year, and the same amount will be added to it every year for next three years. “During the 11th plan, we would require Rs 3,000 crore to create a corpus. Expenditure on the scholarships will be Rs 600 crore,” Chidambaram said.

The main objective of this ambitious scheme is to ensure that benefits of Sarva Shiksha Abhiyan (SSA) do not go waste. SSA managed to improve enrolment by 25 million between 2001 and 2005, reducing the out-of-school children to 3 to 4 per cent in the hardest to reach 6-14 age groups.

The HRD ministry’s latest report shows that dropout rates at primary-level are declining, with the girls’ dropout rate declining more sharply. Gender parity, it suggests, has improved from 0.81 in 2001 and 2002 to 0.93 at the elementary stage of education. Transition rate from primary to upper primary (class V to VI) has also improved to 83.72 per cent.

The performance of the SSA has to be sustained; hence the scholarship scheme for secondary students, said HRD ministry sources, adding the scheme would facilitate continuity in education from upper primary to secondary-level.